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Charities

ICAEW Tax Faculty provides analysis of the announcements relating to the taxation of charities in the 2018 Budget.

Complete analysis

Download a PDF of the Tax Faculty's summary of the announcements on tax and related matters in the Autumn Budget 2017

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Small trading exemption

Three measures aimed at reducing the administrative burden on charities were announced in the Budget.

FB 2018-19 will include legislation to increase the small trading exemption limits that apply to charities. These limits allow charities to engage in some small-scale trading without incurring a tax liability on the profits, so long as the trading does not relate to the charity’s primary purpose.

The current limits are:

Annual charity income Maximum non-primary purpose trading
Under £20,000
£5,000
£20,001 to £200,000
25% of annual turnover
Over £200,000
£50,000

The limits after April 2019

Annual charity income Maximum non-primary purpose trading
Under £32,000
£8,000
£32,001 to £320,000
25% of annual turnover
Over £320,000
£80,000

Gift aid small donations scheme

The government will introduce secondary legislation to increase the gift aid small donations scheme individual donation limit to £30. This will be effective from April 2019.

Retail gift aid scheme

Charities operating the retail gift aid scheme are currently required to issue annual letters to donors. This requirement will be relaxed to every three years where the total donations in a tax year are less than £20. This will be effective from April 2019.